Unfortunately, FUD from Microsoft is likely to be at least somewhat effective. The less technically-inclined are likely to actually listen to what Microsoft says, and if they do and they have the say as to what plugins get installed on their corporate network, then lo and behold, Chrome Frame won't get installed on their corporate network, and Microsoft won that small piece of the battle. Anyone who really pays attention and actually knows anything about the issue will know that it's pure FUD, but unfortunately, FUD still affects what people think - especially when the people doing the listening aren't all that well-informed. So, this move may very well look stupid, but from Microsoft's point of view, it's likely better to spout FUD than admit that Google is actually helping to clean up Microsoft's mess.

This would all be true and of great importance if Microsoft's reputation was still what it once was.

However, Microsoft's reputation is very heavily tarnished. They have virtually no credibility left. Their announcement is clearly and demonstrably self-serving (and very transparent) FUD. Everyone with half a brain can see it for what it is.

Microsoft might even be digging a bigger hole for themselves here, if that was even possible.